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Auto Lease Buyout Loan | Is It The Right Option For You?

Auto Lease Buyout Loan | Is It The Right Option For You?

When your car lease is up, you will have to decide whether to obtain an Auto Lease Buyout Loan and purchase the vehicle or turn the car back into the dealership. The decision that makes sense for you depends on your budget, the car’s price, and whether you really want the car. If you are considering a lease buyout loan, you have some thinking to do before making your decision.

Depending on your contract, you may be able to purchase your leased car for the buyout price. The price will be noted in the contract you signed at the dealership. When you apply for a Lease Buyout Loan, it will be like when you purchase a used car. Accordingly, you can finance the transaction with a Lease Buyout Loan or pay for the vehicle in cash.

How A Lease Buyout Loan Works

If you opt for a lease buyout when your lease is complete, the price will be based on the car’s predicted value of the vehicle at the end of the lease. This amount may also be called the buyout amount or purchase option price. If you decide to use the buyout option, you pay the set amount plus any additional fees.

How To Pay For A Lease Buyout

While you can pay for the leased vehicle with cash, Pearl Hawaii Federal Credit Union offers an Auto Lease Buyout Loan to our members.

Before Buying Out Your Lease

If you love your car, buying out the lease may seem attractive. Although you may love the car, it may not make financial sense if it’s not affordable to you. First, look at your financial situation and be realistic and honest. Car payments should be no more than 10-15% of your net income. Additionally, a monthly car payment may be more than a monthly lease payment. When you looked at your budget, did you accommodate for this extra expense?

When deciding to apply for an Auto Lease Buyout Loan, consider a number of factors to determine if it’s a sound financial move for your personal situation.

  • Do you have to pay excess mileage charges?
  • Whether you’ll have to pay reconditioning or excess wear-and-tear charges
  • What is the value of the vehicle in its current condition?
  • Consider the mechanical history of the car.
  • Do you have to pay for reconditioning or excess wear-and-tear charges?
  • Can you afford the monthly car payments of an Auto Lease Buyout Loan?

If you are unsure what the car payment could be, please contact us. Depending on your situation, a lease buyout could make sense for you. Or you may want to turn it in and lease a new car. Running the numbers with our auto loan calculator could help you decide.

Don’t forget to compare buying a used car to your lease buyout price to see if you can get a better deal on a similar used vehicle elsewhere. While you won’t have the comfort of knowing the vehicle’s past like you would with a lease buyout, you may be able to save some money.



For more information concerning how an auto lease works, visit CFPB Consumer Laws & Regulations.  Consumer Financial Protection Bureau (CFPB) is a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.


It helps to understand how a car loan is calculated and how car payments work. Before you head to the dealership, please take a moment to decide what monthly car payment you can afford. First, you need to consider your budget. Most importantly, look at your situation and be realistic and honest. Car payments and the auto loan you receive should be affordable and doable.





If you need to borrow money, we can help you. If you’re still not sure whether a loan is a right option for you, call us at 808.73.PHFCU (737.4328) or visit one of our locations on Oahu (Waipio, Waianae, Ewa Beach, Honolulu,  Airport,  and Pearl Harbor). Our team is ready to look at your financial situation and recommend the best option for you. You can also apply online to get started…